RE:Desjardins: Target at 82$ (from 80$)Next year 2023, if we get to $5.2B in LTD as the article suggests, we'll get the higher Rating for sure, and we should be at $3.3B NET LTDebt. It's hard to gage as to what that $400M that's freed up from the Alstom sale will be used for, and it may have already been spoken for. That's phenominal compared to $11B LTD pre BT closing. Rejoice everyone. Balance sheets sometimes give a tainted look at things. Depending on what the company wants to use cash for. As I said the year end Financials tell somewhat the real story But even there they can show us what they want. One thing for sure there is, that 2023 will be a great year. I had a feeling that we would get this kind of LTD repayment schedule, and some people here thought that I was wrong. Mind you I/we lucked out with this strong demand from the BJ Industry. I never expected B to B as strong as it was. That really helped speed things up on the LTD repayment schedule, as well as cash for PP&E and Inventory due to increases in investment, in these future cash generating areas.
As for the total FCF of $759M projected from Dejardins bellow. I think they're light by $100M at least, just based on the $6.5B of Projected Revs from Bombardier. We should be at around $900M of FCF for 2022 because I believe their Revs should be a lot higher than $6.5B projected by the company. That's phenominal FCF, considering the eventful changes going on in every aspect of the business. Look at the cash spent for all those improvements to Service, Manufacturing, & LTD repayment, not including the high interest payments still paid, until we hit promisland of$200M to $250M Interest paid annually. Enjoy the upside Traders. Cheers 859
lb1temporary wrote: Note from LB1: I don't copy the summary, it's the same as others but a part of the full report which is interesting and novel.
Strong FCF beat—2022 guidance is now considerably higher and we foresee US$0.750–1.00b of debt repayment in the coming nine months. The FCF outperformance was driven by stronger working capital performance and increased interest cost savings from deleveraging. Capex was above our forecast at US$81m (we expected US$60m). As of June 30, pro forma liquidity was ~US$1.8b (includes restricted cash of US$0.4b). Management increased its FCF guidance to >US$515m (from >US$50m), which we still view as conservative (we now expect US$759m; consensus was at US$196m). For 2022, capex is unchanged at US$200–300m (we adjusted our forecast to US$265m). We still do not factor in any proceeds from potential real estate divestitures.
From a leverage standpoint, we estimate that BBD will have net debt/TTM EBITDA of 5.4x (down from 6.0x previously) in 2022 and 3.3x in 2023 (down from 8.1x in 2021). Management stated it will continue to manage debt proactively and that debt reduction is ahead of schedule. Interestingly, Moody’s upgrade report on BBD in July stated that a financial leverage ratio below 6.0x and sustainable FCF could lead to an additional ratings upgrade. This is positive; as previously mentioned, we expect the company to end 2022 with a ratio of 5.4x (see Exhibit 4). These upgrades could open the company to a larger pool of institutional investors. We did include the US$400m of restricted cash released from the asset sale to Alstom in our 1Q23 estimates. Based on FCF expectations for 2H22 and the upcoming US$400m, we forecast total cash of US$1.9b at the end of 1Q23, which could translate into US$0.75–1.00b of debt repayment in the coming nine months with additional interest rate savings.